The Financial Post reports in its Saturday, Oct. 31, edition that though most professional investors are loath to admit it, luck sometimes plays a very important role in investing. The Post's Peter Hodson writes that it happens, you buy a stock and it immediately goes after you own it. Mr. Hodson calls Cineplex shareholders unlucky. Cineplex had agreed to a $34-per-share takeover by Cineworld Group in December. The announced premium was 35 per cent. Cineplex shares were above $50 in 2017, so there might not have been extreme rejoicing on the deal, but it was a good premium, and all cash, so not so bad as far as takeovers go. Of course, however, a few months after the deal everything changed. COVID-19 and lockdowns were not good for most businesses, but for a movie theatre the lockdown was a disaster. On June 12 it all fell apart, and the deal with Cineworld was scuttled. Cineplex shares are now $5.09, 85 per cent below the takeover price. The dividend has been discontinued, and many are questioning its survivability, with it having a fairly hefty debt load. Even with some theatre reopenings, many studios have delayed movie releases, adding further to shareholder woes.
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